Lucky Friday Miners Go on Strike

Hecla Mining Co. on March 13 reported the United Steelworkers Union Local 5114 went on strike at the company’s Lucky Friday mine, located in Mullan, Idaho. “We are disappointed in USW Local 5114’s decision to walk out, because this decision benefits no one — not the workers, their families, the local communities or the company,” said Phillips S. Baker Jr., Hecla’s president and CEO. “Lucky Friday has been an important part of the local economy for nearly 75 years, providing jobs with an above-average wage plus benefits.”

The previous six-year contract between Hecla Mining Co. and the United Steel Workers expired in April 2016. While both sides have been negotiating with the help of a federal mediator, they reportedly reached an impasse in February. Hecla has reportedly proposed changes to miners’ health care, scheduling and bonus pay.

“Our last, best and final offer provides competitive benefits but also provides the flexibility necessary to operate the mine successfully in a changing economic and regulatory environment,” Baker said. “Since the Lucky Friday is our highest cost mine, the changes will allow costs to improve. While it is unfortunate, Local 5114 has taken this action, we believe that with Hecla’s cash flow, and strong treasury, the strike will not have a material impact on our financial position.”

The Lucky Friday mine produced more than 3.5 million ounces (oz) of silver in 2016, an 18.8% over 2015, mainly due to higher mill throughput, grades and recovery in 2016. The mill operated at an average of 844 tons per day (t/d) in the fourth quarter of 2016 and 803 t/d for the full year. The company recently completed the No. 4 Shaft Project, which will extend the life of the mine by granting it access to deeper, higher grade ores and it has seen an improvement in cash as it encountered higher-grade ore. For the fourth quarter, however, the company reported all-in sustaining costs of $18.51/oz after byproduct credits. The spot price for silver is currently less than $17/oz.